Results 1 to 100 of 238

Michigan's Regulatory Crimes: Bureaucrats' Hidden Criminal Law

This report explains why assigning criminal penalties to administrative rules and regulations should worry anyone concerned about the rule of law and the potential for abuse in the administration of criminal justice. It describes several reasons why allowing administrative agencies determine what is criminal behavior is problematic, using examples from Michigan’s administrative rules. It also outlines some basic principles that should help guide efforts to reform Michigan’s regulatory code and practice.

Student Mobility Scholarships: Helping Families Access the Best Schools

Michigan could support low-income families’ efforts to transport their children to better schools and boost these children’s chances for upward socioeconomic mobility by creating Student Mobility Scholarships. A transportation scholarship plan is rooted in the idea of providing a more level playing field for Michigan's most economically disadvantaged families. The idea is for the state to assist qualifying families in paying some of the costs incurred from transporting a student to a school of their choice.

Protecting the Secret Ballot: The Dangers of Union Card Check

A secret ballot election is one where individuals get to make a private choice based on their own personal decision, and this is how most unions certification elections work. However, unions can also become certified to be the exclusive bargaining representative of a workplace through a process known as "card check." Under this method, unions can "win" an election when a majority of the workers sign authorization cards. The significant downside to elections via card check is that workers can easily be pressured, intimidated and even coerced into signing cards because they are not afforded the privacy of a voting booth.

Unions have repeatedly lobbied to make it easier for them to use card check elections, and a new bill in Congress would do just that: the Protecting the Right to Organize Act, or PRO Act. This report explains why certain provisions of the PRO Act are problematic, and why it is important to protect the right of workers to use the secret ballot for union certification elections.

Michigan School Privatization Survey 2019

This is the 17th edition of the Mackinac Center's annual school privatization survey. We ask every school district in the state if they outsource one of the three main noninstructional services — custodial, transportation and food services. The results from this year's survey show that 69.7% of school districts contract out for at least one of these services.

The Wayfair Decision: How Michigan Policymakers Should Respond

The U.S. Supreme Court’s ruling in South Dakota v. Wayfair last June overturned decades of precedent governing which businesses states could subject to collection and remittance requirements for sales taxes. This report offers guidance on how Michigan should modify its tax laws to implement these new taxation standards. It raises important questions that lawmakers should consider before subjecting new businesses and entrepreneurs to new tax collection requirements.

Workforce Development in Michigan

This report provides a survey of existing workforce development efforts in Michigan, both public and private. It includes a review of career and technical education provided by K-12 school districts, occupational training programs provided through community colleges, as well as job training offered by for-profit entities, unions, industry associations and private, nonprofit organizations. After reviewing these current programs, the report offers general skepticism about the ability of the state to provide the type of workforce development that many politicians claim is needed.

Multilateral Disarmament: A State Compact to End Corporate Welfare

This study provides a plan for how states can end the harmful competition that the practice of corporate welfare encourages. It describes why corporate welfare is damaging to local and state economies and a zero-sum game from a national perspective. It also ranks the states based on how many handouts they make to favored businesses.

In addition, it offers an entirely new strategy to end policies that economists agree are wasteful. By entering into a state compact, as they are authorized to do under the U.S. Constitution, states could agree not to offer preferential tax treatment or other subsidies in an attempt to lure businesses into their borders. Instead, states will compete as they were designed to under the U.S. Constitution, based on regulatory burdens, business culture and broad-based tax policy.

Ending the Skimming of Union Dues from Federal Child Care Funds

This report, jointly published by the Freedom Foundation and the Mackinac Center for Public Policy, outlines how the federal government can put an end to the inappropriate use of funding for two federal programs: the Temporary Assistance for Needy Families and the Child Care and Development Fund. Despite Supreme Court rulings against the practice, several states still allow unions to siphon off dues payments from these funds intended to support home care and child care services for low-income families and the disabled.

A Primer on Michigan's Criminal Justice System

This report describes the basics of how Michigan’s criminal justice system works: explaining some essential features of criminal law, the various layers of law enforcement, adjudication processes, prison policy and more. Unlike most policy papers, however, this report is meant to be strictly descriptive. That is, it does not attempt to judge the effectiveness of Michigan’s current criminal justice system or provide policy recommendations. It is hoped that the information contained here will contribute to more informed debate about how to best improve Michigan’s criminal justice system.

Questions for Appropriators

This questionnaire was developed to guide lawmakers as they scrutinize agency budget requests. In both good times and bad, the sum of these requests will always exceed available revenues. Government agencies’ and program budgets should never operate on auto-pilot. By following this template and obtaining basic information about each program’s origin, purpose, performance, legal authority, funding history and federal connections, policymakers can then hone in on specific changes to consider for the programs — including funding or staffing levels, performance measures and legislative reforms.

The conversation this information will spark can help forge agreement about how to efficiently and effectively meet the needs of Michigan residents and how to use the final state budget to best serve the needs of the public. Careful consideration of spending priorities such as this can boost public confidence in state government and elected officials.

From Prohibited to Permitted: A Legal History of Corporate Handouts in Michigan

Elected officials today regularly try to woo large companies into locating to their state or city by offering them special tax treatment or subsidizing them in some way. States and cities compete with each other in this regard — Michigan is no exception — and this competition makes national headlines when well-known companies choose to relocate or expand. With this in mind, one might reasonably assume that publicly funded economic development is a long-standing, firmly established practice. But that’s not the case in Michigan.

This report chronicles the history of Michigan Supreme Court decisions on this issue. It is not a formal legal review of the case law, but rather a historical account of the most important cases, spanning from Michigan’s earliest days as a new state to the ratification of the current constitution in 1963. The narrative that unfolds will surprise those not familiar with Michigan’s unique experience with taxpayer-funded corporate handouts.

Conflict to Cooperation: Collaborative Management of Federal Lands in Michigan

The actions of federal land managers can often set private landowners and the general public at odds with government agencies. This conflict can take several forms: overly strict rule enforcement, intractability in settling boundary disputes, delays in issuing permits and stringent restrictions on accessing public lands. This paper reviews some of the laws governing federal lands, as well as describes some of the conflicts that have arisen. It then gives examples of collaborative management approaches that have avoided or resolved conflicts in Michigan and around the country. Applying them more frequently in Michigan could help reduce conflicts across the state and lead to improved environmental outcomes, as well as increased public access to Michigan’s national forests.

Michigan School Privatization Survey 2018

This is the 16th edition of the Mackinac Center's annual school privatization survey. We ask every school district in the state if they outsource one of the three main noninstructional services — custodial, transportation and food services. The results from this year's survey show that 70.5 percent of school districts contract out for at least one of these services.

How Bail Works in Michigan and Recommendations for Reform

Bail is the process by which criminal defendants secure their release while awaiting trial. It allows people who have been charged with a crime to be released from police custody. In recent years, the criminal justice system has drawn criticism from across the political spectrum because cash bail has come to be imposed on so many criminal defendants. Data increasingly indicate that releasing a defendant pretrial has a significant impact on his long-term prospects. It affects the defendant’s ability to retain his housing, employment, and child custody, the probability that he will go on to commit another crime and even the likelihood of a favorable legal outcome in his case.

Research has also revealed that the majority of jail inmates are legally innocent but are being detained because they cannot afford to bail out before and during their trial. This imposes large costs on local governments but provides no clear public safety benefit. Finally and most importantly, states with misguided pretrial release policies may infringe on defendants’ liberty interests, opening themselves up to litigation and the risk of an injustice. For these reasons, stakeholders and practitioners in Michigan should work to understand the purpose of bail and implement the best pretrial practices for respecting individual rights and public resources.

This report explains in detail how the bail process works and provides recommendations for reforming it in a way that benefits criminal defendants, the court system and taxpayers.

Proposal 2 of 2018: An Explainer and Key Arguments

This policy brief describes the history of redistricting and how it is currently practiced in Michigan and in other states. It also explains Proposal 2 and how redistricting would work if it is passed. Finally, it presents an equal number of arguments for and against the proposal.

Roads in Michigan: Quality, Funding and Recommendations

This study examines the funding and condition of Michigan’s roads and bridges and presents policy recommendations regarding them. The first section of this study describes the different types of roads in Michigan, which government entity is responsible for each type and their current estimated condition. The section after that explains how road funding works. The next section then discusses how public goods such as roads should be priced and funded, based on standard economic theory. It also attempts to measure the level to which Michigan’s roads are underpriced and underfunded. The final section concludes with some policy recommendations.

Choices Voices: A Survey of Michigan Charter School Parents

Choices & Voices

This report highlights the results of a survey of nearly 1,500 parents of charter school students in Michigan. Charter schools are state-funded, tuition-free schools of choice, authorized by public agencies such as universities and community colleges.

The survey asks parents questions concerning their satisfaction with charter schools, why they chose to leave their district-run school, difficulties they may have faced enrolling in a charter school and ideas for improvements, among others. The goal of this survey is to better inform policymakers about the on-the-ground experience parents have with charter schools, so that they might pursue policies that improve Michigan's charter schools.

View PDF

What's Wrong With Michigan's No-Fault Automobile Insurance

A PDF copy of this study is available.

On Oct. 1, 1973, Michigan joined a growing number of states in adopting a “no-fault” automobile insurance law, which has remained in tack ever since. This policy brief outlines the variety of problems plaguing Michigan's auto insurance laws and explains why these issues are leading to the most expensive car insurance premiums in the nation.

The brief also describes several reform ideas for how to fix Michigan's no-fault insurance system. These reforms would maintain the no-fault approach to car insurance, but would put downward pressure on premiums, a benefit that would be enjoyed by all Michigan drivers.

A Survey of Michigan Parents Who Use School Choice

This report highlights the results of a survey conducted of Michigan parents who exercise some form of public school choice for their children. Among the diverse group of 837 parents from across the state who were interviewed, substantial majorities gave high marks to their chosen schools, said the experience boosted their expectations of their children’s future success and would likely recommend choice options to other parents. Respondents also said that information they receive from other parents influences their school choice decisions, in addition to published school performance data and in-person visits. Survey results further revealed that most parents highly value academics in making their decision, though safety and discipline are leading considerations as well.

Michigan School Privatization Survey 2017

Click here to view the PDF of the full study.

This is the 15th edition of the Mackinac Center's annual school privatization survey. We ask every school district in the state if they outsource one of the three main noninstructional services — custodial, transportation and food services. The results from this year's survey show that 71.5 percent of school districts contract out for at least one of these services.

How School Funding Works in Michigan

Discussions about school funding can create more confusion than clarity. Each state has its own intricacies and peculiarities. Michigan is no exception. Funding flows down from different sources, often based on different formulas and intended for different purposes. There’s no one unified system that controls school funding — rather, schools rely on a number of systems layered on top of each to supply them with resources.

This publication presents a brief overview of some of the key components of Michigan’s school funding system, if it can be called that. The goal is to provide a general understanding of how tax dollars reach schools and what they are intended for.

How to Stop the 'Dues Skim' of Federal Home Health Care and Child Care Funding

A PDF copy of this study is available.

Introduction

United States taxpayers currently spend $545 billion annually on the federal government’s Medicaid program. This money is meant to aid the disabled and vulnerable and to support low-income families. However, millions of these dollars are being redirected before they ever reach the people they are meant to support.

About $41.5 billion of Medicaid funds are sent to states through the Home and Community-Based Services “waiver” program.This waiver allows those eligible for Medicaid — individuals suffering from a disability, illness or other affliction — to use these funds to pay for in-home care, as opposed to enrolling in an institution. These in-home services are often provided by family members or friends, or other local, independent providers. Medicaid payments are sent directly to these providers on behalf of their Medicaid-eligible “client.”

 

This Isn’t Working: How Michigan’s Licensing Laws Hurt Workers and Consumers

Click here for a PDF of the full study.

The Declaration of Independence lists the “pursuit of happiness” as one of Americans’ “unalienable rights.” For most, this includes the ability to pursue a vocation of their choice. But occupational licensure laws stand in the way of many people trying to exercise this right. For too many people, the right to pursue their dreams has been halted by governments that require them to jump through hoops, pay fees and meet other often arbitrary and inconsistent requirements.

This report gathers data on every occupational license in Michigan. It describes the impact and costs of licensure laws, as documented in the empirical research that has been conducted on this issue. It explains how and why licensing requirements are typically created, but also outlines some of the fundamental problems with a broad licensing regime. Finally, it compares Michigan’s licensing requirements to those of other states and makes recommendations for how the state could reform occupational licensure for the benefit of job-seekers and entrepreneurs and for the state’s economy as a whole.

Cigarette Taxes and Smuggling: A 2016 Update

Click here to view the PDF of the full study.

Introduction

Since 2008 the Mackinac Center for Public Policy — and more recently in conjunction with the Washington, D.C.-based Tax Foundation — has worked to estimate the degree to which cigarettes are smuggled into and out of American states. Our research, and that of other scholars too, suggests that smuggling is a rampant problem, particularly in states with high cigarette excise taxes.

Unintended and unforeseen consequences are a frequent problem in public policy. Few politicians realize when they vote for higher excise taxes that doing so may dramatically increase cigarette-related crime, such as smuggling. These crimes not only deprive local and state governments of tax revenues, they also tend to descend into violence, which produces all sorts of unnecessary damage. Policymakers should take these realities into consideration when contemplating how much to tax cigarettes.

This report analyzes the relationship between cigarette tax rates and cigarette smuggling rates. It relies on the same statistical model used in our previous studies, but uses the latest available data from 2014. New York State once again claims the highest smuggling rate in the nation. In fact, according to our analysis, New Yorkers consume more smuggled cigarettes than they do legally taxed ones. New York state has the highest excise tax rate on cigarettes in the country at $4.35 per pack and New York City adds another $1.50 tax. Arizona, Washington state, New Mexico and Minnesota round out the top five states for percentage of in-bound smuggling. Michigan ranks 12th, down two positions.

Problems With Estimating the Union Wage Premium

Click here to view the PDF of the full study.

The “union wage premium” — the amount a union worker makes in wages and salary above a similar nonunion worker — is often used to highlight the potential value of joining a union. Unions claim that if workers unionize, their wages will increase, because allegedly the average union worker makes more than the average nonunion worker. If this were universally true, it seems like a compelling argument for enrolling in a union. However, the decline in union membership rates over the last several decades shows that an increasing number of workers have not been persuaded to join existing unions or organize new ones, suggesting that they are not convinced that becoming a union member will automatically boost their pay.

Some still maintain that union members earn significantly more, on average, than nonunion workers: the American Federation of Labor and Congress of Industrial Organizations union says that “union workers’ wages are 27 percent higher than their nonunion counterparts” and the U.S. Secretary of Labor claims that union workers make $950 per week compared to nonunion workers’ $750 per week. But these statistics are based on a relatively simplistic view of the data. As this paper will demonstrate, there are significant challenges to using official government data to estimate the size of the union wage premium.

An Evaluation of Michigan's 21st Century Jobs Fund

In 2005, Michigan Gov. Jennifer Granholm launched a project intended to stimulate he state’s economy: the 21st Century Jobs Fund. At the time the state had not yet recovered from the 2001 national recession and was suffering the country’s highest unemployment levels.

After a tough political battle to establish the program and after making a number of compromises, the 21st Century Jobs Fund was created. The program was to be funded from 2006 to 2015, and in the 2013-14 legislative session, under a new governor and Legislature, it was extended until 2019 and provided with $75 million in continued annual funding.

After ten years of existence, this program has received little attention and its effectiveness has never been measured. All government programs should be reviewed regularly, and it is time for a close look at the 21st Century Jobs Fund.

Michigan School Privatization Survey 2016

Click here to view the PDF of the full study.

This is the 14th edition of the Mackinac Center's annual school privatization survey. We ask every school district in the state if they outsource one of the three main noninstructional services — custodial, transportation and food services. The results from this year's survey show that 70 percent of school districts contract out for at least one of these services.

Worker's Choice

Freeing unions and workers from forced representation

Where there’s a unionized workplace, there’s forced representation. That’s true regardless of whether a state is right-to-work or not. Even if a union can’t get a worker fired for not paying dues, the worker is still bound by union representation.

A Survey of Michigan's Private Education Sector

Click here to view the PDF of the full study.

According to data collected by the state, Michigan has 601 private schools that enroll about 113,000 students — about 7 percent of all students in the state. All but 14 of Michigan’s 84 counties have at least one private school operating within their boundaries. Despite the fact that private schools in Michigan are widespread, there is very little publicly available information about them. In response to this need, the Mackinac Center, with the help of the Michigan Association of Nonpublic Schools, conducted a survey of private school administrators from all across the state.

School Spending and Student Achievement in Michigan: What's the Relationship?

Click here to view the PDF of the full study.

Does Michigan devote enough money to primary and secondary education? Do school districts receive enough revenue to ensure the vast majority of enrolled students graduate college or career ready? How much does it cost to provide a quality educational experience? These are the types of questions for which the Michigan Legislature recently paid nearly $400,000 to obtain some answers.

These answers would clearly be helpful to policymakers who determine how many tax dollars to allocate to schools. But these concerns about the adequate level of school funding are based in part on the common assumption that spending more on K-12 schools will generate better academic outcomes. A more fundamental question that policymakers might want to answer before determining the appropriate level of funding for schools is: What is the relationship between school spending and student achievement in Michigan?

That is the question this paper attempts to answer.

To read a response to a critique of this study, click here.

Civil Forfeiture in Michigan: A Review and Recommendations for Reforms

Forfeiture is a practice by which law enforcement transfers assets – cash, vehicles, homes, etc. – from private citizens to the government. Criminal forfeiture occurs after the conviction of a person and is widely-accepted as legitimate.

The problem is with civil forfeiture.

Civil forfeiture occurs outside of the criminal justice system and does not require a conviction of a crime. This has led to instances of abuse in Michigan, which has among the lowest-rated forfeiture laws in the United States. The Mackinac Center believes property should only be transferred from citizens to the government after a criminal conviction is secured.

This study explains how civil forfeiture works, how it differs from criminal forfeiture and what reforms state policymakers should consider in order to protect the rights of Michigan residents.

Bringing Financial Transparency to Michigan's Public Sector Unions

Nathan Mehrens, a labor expert who helped implement financial reporting requirements for private sector unions while serving at the U.S. Department of Labor, explains how Michigan should reform its union transparency laws. Most public sector unions do not have to publicly disclose meaningful financial information, and Mehrens argues that Michigan lawmakers should adopt financial reporting requirements similar to those used by the federal government.

Worker's Choice: Freeing Unions and Workers from Forced Representation

Worker’s Choice provides a method to fix the "free/forced rider" issue that exists in right-to-work states. Without requiring a complete overhaul of collective bargaining laws, this policy can free unions from having to provide services to employees who do not support them, and allow individual employees to represent themselves and negotiate independently with their employers.

Unionization for the 21st Century: Solutions for the Ailing Labor Movement

For years union membership has been in decline. In 2012 union membership hit the lowest percentage of the American workforce since 1916. The union business model, based largely on industrial organizing efforts from the 1930s, does not appear to carry over well for today’s educated and transient workforce. This study outlines several ideas that unions could embrace that would grow their membership and improve the services workers receive.

Overcriminalizing the Wolverine State: A Primer and Possible Reforms for Michigan

(Editor’s note: This paper was co-authored with James R. Copland and Isaac Gorodetski and jointly published with the Manhattan Institute for Policy Research).

At present, Michigan’s vast, disorganized criminal law inherently places the Wolverine State’s residents at risk of unintentionally violating a growing array of regulatory crimes that are difficult to discover and understand. The complexity of administrating such a criminal code threatens to divert scarce resources away from the enforcement of serious violent and property crimes. This study analyzes the size and scope of Michigan’s criminal law and makes policy recommendations aimed at curbing this “overcriminalization.”

Michigan School Privatization Survey 2014

The growth of school support service privatization has slowed. The 2014 survey shows that the percentage of school districts that contract out for food, custodial or transportation services increased just 0.4 percentage points, the smallest growth recorded since the survey began. Each service, however, increased and satisfaction with contracting remains high.

Making Michigan Right-to-Work: Implementation Problems in Public Schools

This paper examines how public school districts responded to Michigan's 2012 “right-to-work” law. It describes the key findings from reviews of more than 500 teacher collective bargaining agreements. It also raises several questions about the legality of some union contracts with regard to this new law.

Approximately 75 percent of districts with contracts subject to the right-to-work law removed language that would require employees to financially support a union as a condition of employment. Both legal and policy questions are raised by the remaining 25 percent of districts, which kept mandatory dues language in one way or another, despite having a contract that took effect or was modified after the law's effective date.

The study describes five issues with these contracts. Twenty-three contracts made no apparent changes and kept mandatory dues language. Eight districts created a separate agreement to require mandatory dues payment. Fifteen contracts were ratified before they would be subject to the right-to-work law, but then didn’t take effect until much later. Five contracts made only the mandatory dues language immediately effective, while delaying the rest of the contract. Finally, at least six districts have modified parts of their contract without making the rest of it compliant with the right-to-work law.

Proposal 1 of 2014: Summary and Assessment

Download the full study here.

On Aug. 5 Michigan voters will be asked to approve or reject Proposal 1, which would modify the state’s personal property tax. The legislation that would go into effect if Proposal 1 were approved by voters creates three new exemptions for certain businesses that are currently subject to the personal property tax; it does not eliminate the personal property tax. Commercial and industrial businesses with less than $80,000 of personal property will be exempt, and, eventually, all manufacturing personal property will be exempt. These exemptions amount to an estimated $600 million tax cut when fully implemented.

The package of bills includes a mechanism for reimbursing local government units for the revenue lost from these new exemptions. The state would set aside a portion of the statewide Use tax revenue, and use this revenue to reimburse local governments. It is estimated that local governments will be reimbursed for the entirety of the revenue lost due to the personal property tax cuts.

The state would also levy a new, but relatively small, tax on manufacturing personal property that qualifies for one of the exemptions described above, except the small parcel exemption. The state estimates this to raise $117.5 million, making the overall net tax cut of the legislation package worth about $500 million.

Roadblocks to Reform?: A Review of Union Contracts in Michigan Schools

This study focuses on Public Act 103 of 2011, which made teacher evaluation, layoff policies and teacher placement prohibited subjects of bargaining, among other things. After surveying 200 Michigan school district collective bargaining agreements, this study finds that as many as 60 percent of districts could have collective bargaining agreements in place that contain language prohibited by PA 103.

Some districts negotiated with their unions to add language stating that if circumstances changed, pages of prohibited language would take immediate effect. Others simply changed the word “teacher” in order to keep the prohibited language but have it apply to other staff members. Finally, some districts appear to have kept prohibited language without explanation.

This study includes further examples and lists of districts that kept the prohibited language in their contracts. As a solution, penalties could be added to the collective bargaining reform laws in order to encourage district compliance.

Michigan School Privatization Survey 2013

Michigan’s school districts have saved money by turning to the private-sector to provide support services. This 2013 survey shows that 65.5 percent of districts now contract out food, custodial or transportation services to private-sector vendors. This is an increase from 31.0 percent in 2001. The survey covers the three services, satisfaction and insourcing among Michigan’s public school districts and has been performed in 2001, 2003, and annually since 2005.

The Public School Market in Michigan: An Analysis of Schools of Choice

This study examines the use of Schools of Choice throughout Michigan over the last decade. Nearly 100,000 Michigan students use Schools of Choice to attend a school outside of the district in which they live. Participation has grown steadily, with enrollment growing by 144 percent over the past 10 years.

This study finds that students enter districts that have higher graduation rates and higher test scores. On average, Schools of Choice students chose districts with higher pupil-teacher ratios, lower expenditures per pupil and higher average teacher salaries.

A New Turnaround Model: Michigan's Highland Park Goes Charter

This brief examines the series of events that led to the Highland Park school district being converted to a system of charter public schools in 2012. Used as a strategy to help the district eliminate its large fiscal debt while still providing resident students with a local public school option, Highland Park's charter conversion is one of the first of its kind in the state and even the nation.

During the first year of charter school operation, students demonstrated significant learning gains, with some grades posting academic growth far above the average Michigan student.

Criminal Minds: Defining Culpability in Michigan Criminal Law

The Mackinac Center for Public Policy recently published “Criminal Minds: Defining Culpability in Michigan Criminal Law,” which addresses the element of intent in Michigan statutes and case law. The policy brief is authored by Mackinac Center Executive Vice President Michael Reitz.

Conviction of a crime traditionally required a combination of a wrongful act and criminal intent. But frequently the criminal code is used for regulatory purposes, and those laws often omit a requirement that the prosecution prove the existence of criminal intent for a conviction to occur. Consequently, individuals can be charged, convicted and imprisoned for committing crimes without possessing a culpable state of mind — often for behavior a reasonable person would not think of as criminal.

The policy brief proposes a reform that would clarify the element of intent in criminal statutes. If the Legislature enacts a criminal statute that is silent on intent, a default intent provision would be incorporated. Such a reform could make for a more orderly criminal justice system and protect the rights of individuals.

Electricity Choice Policies in Michigan: Comment on "Readying Michigan to Make Good Energy Decisions: Electric Choice"

This policy brief is written by the Mackinac Center for Public Policy in response to the report issued on Oct. 15, 2013, by the Michigan Public Service Commission titled "Readying Michigan to Make Good Energy Decisions: Electric Choice," (the "Draft Report") authored by Chairman John Quackenbush and Michigan Energy Office Director Steve Bakkal.

Between the years 2000 and 2012 two distinct changes emerged. Between 2000 and 2008 new suppliers were allowed to start entering the Michigan market and competing with incumbent utilities. Between 2008 and 2012 competition was restricted to guarantee a 90 percent market share for the largest utilities. The analysis of these two periods suggests that market competition tends to bring innovation and lower prices to Michigan electricity consumers, while monopolistic policies tend to raise prices. Michigan should once again embrace opening its electricity market to more entrants to see if they can perform better than the incumbent firms, which will drive down prices for electricity consumers. Michigan allowed such competition to start to emerge during its brief era of Full Customer Choice, and the early results were promising. The initial results from a more tightly regulated and protectionist experiment have been by contrast disappointing.

A video recording of the January 22, 2014 Issues and Ideas Forum featuring the author discussing the topic of expanding the electricity market can be viewed here.

Benefits in Balance: Benchmarking Public Sector Employee Benefits in Michigan

This policy brief reviews the growth of Michigan’s state and local government expenditures from 2000 to 2010 and finds that government employee contributions, particularly the cost of employment benefits, were a primary contributor to the increase in spending. This brief explores the kinds of employment benefits that can be received by employees, as well as the recent changes made to benefits in the government and private sectors. It finds that bringing benefits in line with private-sector averages would save Michigan $5.8 billion and provides recommendations for implementing this policy.

Michigan's Top-to-Bottom Ranking: A Measure of School Quality or Student Poverty?

This study examines the state’s “Top-to-Bottom” ranking, which has been repeatedly criticized by educators for appearing to be correlated with school poverty rates. Mackinac Center research finds that schools that serve more lower-income students tend to receive lower scores on the TTB list.

These results matters because TTB rankings are used to impose consequences on low-ranking schools. This study suggests that Michigan should look at how other states rank schools in an attempt to reduce the likelihood of penalizing schools that serve lower-income students. It also makes the case that a choice-based accountability system is preferred, as it would allow students to escape schools that are not serving their needs and reduce the risk of penalizing undeservedly low-ranked schools.

Economic Growth and Right-to-Work Laws

This study aims to measure the impact of right-to-work laws on states’ economic performance. It uses average annual growth rates in employment, real (inflation-adjusted) personal income and population to measure the economic well-being of right-to-work states. On the whole, the results of this analysis show that right-to-work laws have a statistically significant and economically meaningful positive impact, although the results vary.

Medicaid: Waivers are Temporary, Expansion is Forever

This study, jointly published by the Mackinac Center for Public Policy and the Buckeye Institute for Public Policy Solutions, examines whether states can rely on using federally granted “waivers” to avoid some federal rules and regulations in hopes of expanding their Medicaid programs in a more cost-effective manner. It reports that there are three limitations to such a strategy: waivers are temporary, subject to the discretion of federal agencies and vulnerable to judicial review.

Berrien Springs Public Schools: Reinventing School — Becoming a District of Choices

Michigan’s Schools of Innovation

In this latest installment of the Mackinac Center for Public Policy's new "Schools of Innovation" series, we discuss how Berrien Springs school district is reinventing public school. This study examines how the district has become more racially diverse, enrollment is growing rapidly, and they are using that growth to inject some much needed balance to the school funds. All this has been due to the district’s expansion of digital learning options, becoming a “district of choices.” The effectiveness of virtual learning and the resulting increase in district enrollment have fueled the expansion of other school programs — a marked contrast to the many Michigan school districts that have struggled to maintain their offerings during the state's economic slump.

An Analysis of the Proposed Medicaid Expansion in Michigan

Michigan lawmakers are currently deciding whether to expand the state's Medicaid program to cover people newly eligible for federal Medicaid subsidies under the Affordable Care Act of 2010, commonly known as "Obamacare." A target population for Medicaid subsidies are the uninsured and those with incomes between 100 and 138 percent of the federal poverty level. The authors estimate that in 2014, approximately 177,000 uninsured Michiganders will fall into this category. Assuming 70 percent sign up for Medicaid, the authors estimate the additional taxpayer cost will be $475 million to state taxpayers, and $7 billion to federal taxpayers. 

The study considers several factors, including potential enrollees that are not considered in typical enrollment projections: uninsured people who are already eligible for Medicaid but have not yet enrolled, low-income, privately insured individuals who would switch to Medicaid, and childless adults and others who live below the poverty line and who would now qualify based on the broader definitions of the expansion. 

The study determines that a Medicaid expansion would likely shift many insurance costs to state taxpayers, while other studies have found that as many as 50 percent or 60 percent of new enrollees following Medicaid expansions dropped existing private insurance to do so. Further, both local and federal studies have indicated that Medicaid often delivers substandard health outcomes and access to medical services. Therefore, lawmakers should think twice before widening the program's scope. 

Michigan vs. Florida

Student achievement, education policies and proposals for reform

This study is an examination of Florida and Michigan's performance on the National Assessment of Educational Progress's (NAEP) standardized test, often referred to as "the nation's report card." Immediately prior to and during Florida's immense improvement on these scores from the past 15 years, the state made substantial changes to its public education system. Some of these policies have been rigorously studied and have shown a positive impact on Florida students that Michigan should emulate to improve its static performance.

Proposal 5 of 2012: An Assessment of the Supermajority Tax Vote Requirement

The Mackinac Center for Public Policy recently published “Proposal 5 of 2012: An Assessment of the Supermajority Tax Vote Requirement,” which addresses Proposal 5 on the Nov. 6, 2012 ballot.

The study examines the amendment to the state constitution that proposes to require a two-thirds supermajority vote of both the Michigan House and Senate, or a simple majority vote of the people in a November election, to impose new state taxes or increase any state taxes that currently require only a majority vote of the Legislature. The study concludes that Proposal 5 is likely to provide additional protection against state tax increases, though it may be appropriate to ensure state lawmakers take further steps to ensure the original intent of the proposal.

The Policy Brief was authored by Michael D. LaFaive, director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy. 

Proposal 1 of 2012: The Referendum on Public Act 4

The Mackinac Center for Public Policy recently published “Proposal 1 of 2012: The Referendum on Public Act 4,” which addresses Proposal 1 on the Nov. 6, 2012 ballot, also referred to as the “emergency manager” referendum.

The study examines the claim that local control will diminish if Proposal 1 passes and Public Act 4 is nullified. Public Act 4 had provided expanded powers to state-appointed emergency managers of local governments and school districts that are in a state of serious “fiscal stress or “fiscal emergency.” The study determined that the question in Michigan has not been whether state-appointed managers or court-appointed receivers may replace local elected officials in running a local unit of government; they have been able to do so for decades. The only question is whether state government will participate in the effort to avoid local fiscal insolvency and how it will do so.

The Policy Brief was authored by James M. Hohman, assistant director of Fiscal Policy for the Mackinac Center for Public Policy. 

An Analysis of Proposal 4 of 2012: The Unionization of In-Home Caregivers

The Mackinac Center for Public Policy recently published “An Analysis of Proposal 4 of 2012: The Unionization of In-Home Caregivers,” which addresses Proposal 4 on the Nov. 6, 2012 ballot. The policy brief is authored by Mackinac Center Legal Analyst Derk Wilcox.

The proposed constitutional amendment would authorize the forced unionization of tens of thousands of home-based caregivers in Michigan, allowing the Service Employees International Union to continue skimming millions of dollars in dues from Medicaid stipends meant to help Michigan’s most vulnerable residents. A line-by-line review of Proposal 4 shows that it would not provide any programs or services to in-home care recipients that are not already available, including any improved care, new options for care recipients or taxpayer cost savings.

Proposal 2 of 2012: An Assessment

The Mackinac Center for Public Policy recently published “Proposal 2 of 2012: An Assessment,” which addresses Proposal 2 on the Nov. 6, 2012 ballot, also referred to as the “collective bargaining” amendment.

The study examines how the proposed constitutional amendment would enshrine collective bargaining in the state constitution, which would allow government union collective bargaining agreements to invalidate numerous state laws meant to improve the quality of public services and would likely negate a projected $1.6 billion in annual taxpayer savings.

The Policy Brief was co-authored by Vernuccio and other Mackinac Center analysts: Senior Legal Analyst Patrick J. Wright, Executive Vice President Michael J. Reitz and Assistant Fiscal Policy Director James M. Hohman. Also co-authoring was Paul Kersey, director of labor policy at the Illinois Policy Institute.

The Projected Economic Impact of Proposal 3 and Michigan’s Renewable Energy Standard

The Mackinac Center for Public Policy recently published with the Beacon Hill Institute “The Projected Economic Impact of Proposal 3 and Michigan’s Renewable Energy Standard,” which addresses Proposal 3, the so-called “25 x 25” initiative, on the Nov. 6,  2012 ballot. The policy brief is authored by David G. Tuerck, Paul Bachman and Michael Head of the Beacon Hill Institute.

The proposed constitutional amendment would mandate a 25 percent renewable energy standard for Michigan by 2025. The policy brief estimates the cost of the mandates using  the State Tax Analysis Modeling Program – or STAMP – to determine the economic impact on Michigan. They determine that the ballot measure would impose higher electricity prices and economic costs than are sustainable or environmentally friendly.

The Shortage of Generic Sterile Injectable Drugs: Diagnosis and Solutions

According to the U.S. Food and Drug Administration, the number of times drugs were in short supply almost tripled from 61 in 2005 to 178 in 2010. The figure reached more than 250 in 2011. This means that manufacturers reported to the FDA that they were unable to meet demand for the drugs. Hospital and health-system pharmacists, as well as oncologists, anesthesiologists and other specialists have also increasingly reported difficulties acquiring drugs.

These are mostly injectable drugs for cancer and other important therapies, and they are frequently produced by generic drugmakers. These drugs are not dispensed by community pharmacies, but rather administered by health professionals in clinical settings.

Currently proposed solutions are unlikely to address the crisis satisfactorily. Congress appears ready to give more power to the FDA, but making FDA regulations more onerous will not alleviate the current shortage of crucial medicines.

A more promising approach is to make it easier for competitors to enter the market in response to forthcoming shortages. In general, this means reducing and ultimately removing the FDA’s monopoly on the approval of drugs for medical use. Shifting these medicines to Medicare Part D insurance may also stabilize supply by helping ensure manufacturers receive adequate compensation for the medicine, even as taxpayers are protected from escalating costs.

Alcohol Control Reform and Public Health and Safety

Michigan regulates the sale of beer, wine and “spirituous” (hard) liquor through state statute and rules promulgated by the Michigan Liquor Control Commission. As part of this system, state government intervenes in the spirituous liquor market as a monopoly wholesaler, a role it has filled since the end of Prohibition. The state also mandates that most suppliers of beer and wine grant exclusive sales territories to a select group of wholesalers. These and other restrictions artificially raise prices and reduce the availability of alcohol to Michigan’s consumers.

Last year, a state Liquor Control Advisory Rules Committee was charged with developing alcohol control reform proposals. Some critics, however, have cautioned that the state’s present alcohol laws are necessary to protect public health. This Policy Brief examines the health and safety effects of alcohol regulations like Michigan’s.

Oxford Community Schools: The Great Recession — and the 'Greatest Gift'

Michigan’s Schools of Innovation

In this first installment of the Mackinac Center for Public Policy's new "Schools of Innovation" series, we begin with Oxford Community Schools' experiment with virtual learning. This study examines the district's adoption of Web-based learning to deliver and enhance student instruction. The effectiveness of virtual learning and the resulting increase in district enrollment have fueled the expansion of other school programs — a marked contrast to the many Michigan school districts that have struggled to maintain their offerings during the state's economic slump.

The second, and final, installment of this series is titled "Berrien Springs Public Schools: Reinventing School — Becoming a District of Choices."

Five Options for Addressing ‘Transition Costs’ When Closing the MPSERS Pension Plan

Michigan Public School Employee Retirement Plans
in Need of Reform

This study considers the supposed ‘transition costs’ that would be effected by a state switch from a defined-benefit to defined-contribution retirement system. In it, the “transition costs” are found to be nonbinding and discretionary. In addition, the study offers the state a series of reforms that would diffuse such costs, as well as consideration for the long-term fiscal improvements that would arise from payment of the pension’s unfunded liabilities.

Loar v. Michigan Department of Human Services Brief

This booklet contains the Mackinac Center Legal Foundation’s final legal filing in a nationally known case involving the illegal unionization of Michigan’s home-based day care business owners and providers as government employees. Wright argued the case in the Michigan courts on behalf of Sherry Loar, Michelle Berry and Paulette Silverson, who each own home-based day care businesses.

The Mackinac Center Legal Foundation sued to end the DHS' illegal diversion of so-called "union dues" from state subsidy checks received by home-based day care providers who watch children from low-income families. The "dues" were funneled to a government-employee union that purports to represent more than 40,000 of Michigan's home-based day care providers, who are actually private business owners and independent contractors.

The case was ruled moot by the Michigan Supreme Court after the DHS ceased to collect the dues and the DHS director stated that these home-based day care providers are not public employees.

Michigan School Privatization Survey 2011

Majority of Michigan school districts currently contract food, custodial or transportation services

Despite increased spending in Michigan public schools, districts regularly face tough choices allocating their resources. This study surveys the privatization of the three major noninstructional services: food, custodial and transportation services. The findings are that over half of public schools have privatized at least one of these services; what is more, about 93 percent report satisfaction with the private-sector services they receive, which spells progress towards improving services while spending less.

Estimated Savings From Michigan’s 1997 State Employees Pension Plan Reform

Since March 31, 1997, new state employees who qualify for the Michigan State Employees’ Retirement System have been placed in a 401(k)-style “defined-contribution” retirement plan, rather than MSERS’ traditional “defined-benefit” pension plan. Under the new arrangement, state government makes mandatory contributions to employees’ individual retirement savings accounts, but does not guarantee employees a defined retirement income, as it did under the traditional plan.

In this Policy Brief, the author analyzes state pension data to determine whether state taxpayers have saved money as a result of the switch.

Revenues and Spending of Michigan's Urban, Suburban, Town and Rural School Districts

In the passionate debates over providing equal educational opportunity for all children, it’s frequently argued that large financial inequities create challenges for many public schools, particularly those in lower-income urban areas. This study compares the revenues and operating expenditures of Michigan’s urban, suburban, town and rural school districts. The study’s findings provide a new and unique perspective on Michigan’s school districts.

Reconsidering Michigan's Public Employment Relations Act

Restoring Balance to Public-Sector Labor Relations

Michigan’s Public Employment Relations Act requires local governments and school districts throughout Michigan to bargain collectively with unions representing their employees. The collective bargaining process is a creation of the state Legislature, which also has the power to repeal or amend it.

No area of public policy in Michigan is more in need of fresh thinking than the relationship between government and its employees. With Michigan’s recurring government budget struggles, and with a new Legislature and governor espousing a commitment to performance, efficiency and accountability in government, a new labor law for government employees is imperative.

This report outlines a variety of ways the Michigan Legislature can address the damaging impact of PERA.

Virtual Learning in Michigan's Schools

Virtual learning doesn’t just involve using computers at school; it involves a new method of instructing students. Virtual instruction is provided by teachers working remotely or by specially designed software — or both — and delivered to students through computers or the Internet. In some cases, supplementary instruction might be provided by a local teacher, but the essence of virtual learning is that students no longer need to share a classroom with a teacher to learn.

Virtual learning is not for every student, but it’s not science fiction, either. Right now in Michigan, it’s being used by thousands of students in hundreds of virtual courses in urban, rural and suburban school districts. In fact, Michigan has been seen as a national leader in virtual learning.

This study analyzes the financial costs and academic benefits of virtual learning, and it explores how this innovation could further benefit Michigan public school students.

101 Recommendations to Revitalize Michigan

For policymakers and voters serious about restoring freedom and economic vitality in the Great Lakes State, the Mackinac Center presents the following 101 recommendations.

School Funding in Michigan: Common Myths

Michigan’s state-run school system is the largest and most expensive government service taxpayers support. It employs more than 350,000 people who work in one of the more than 4,100 different entities. The total amount this system expends each year adds up to more than $20 billion. Given the enormity and complexity of the system, it’s no surprise that a number of myths exist about how public schools are funded.

Cigarette Taxes and Smuggling 2010

An Update of Earlier Research

Authors Michael LaFaive and Todd Nesbit update their 2008 cigarette taxes and smuggling study titled “Cigarette Taxes and Smuggling: A Statistical and Historical Review.” The update includes new statistical data to reflect the 27 state-level tax increases that occurred between January 2007 and the end of 2009 in Michigan’s 48 contiguous states.

Michigan School Privatization Survey 2010

Privatization of support services has been a method that Michigan school districts have used for several years to lower costs. More than ever before, Michigan school districts are privatizing the three main support services they offer — food, custodial and transportation. Our annual survey finds that 48.8 percent of Michigan school districts are contracting out for these services. This is an 8 percent increase over 2009.

The largest impetus for contracting is cost savings. The survey found that first-year contracts alone are expected to save districts $16.7 million cumulatively.

Michigan’s Public-Employee Retirement Benefits: Benchmarking and Managing Benefits and Costs

The state of Michigan manages two major statewide defined-benefit pension plans.* The largest plan provides benefits for public school employees through the Michigan Public School Employees’ Retirement System, known as “MPSERS.” The second defined-benefit plan is provided through the Michigan State Employees’ Retirement System, which covers employees of state government and is known as “MSERS.” The MSERS defined-benefit plan was closed to state employees hired after March 1997; these employees were enrolled in MSERS’ new defined-contribution plan.*

This paper reviews MPSERS and MSERS pension and retiree medical benefits and confirms many of the published concerns* related to the level of benefits provided and the associated fiscal challenges facing Michigan taxpayers in both the short and long term.

*Citations provided in the study’s main text.

Reforming Michigan’s Auto Insurance Industry

Some Concrete and Practical Proposals

Michigan auto insurance premiums are among the highest in the nation. The American Association of Retired Persons, in a recent survey, found that Michigan’s premiums were the second highest in the nation, behind only Louisiana. This, combined with a statutory requirement to purchase insurance, has led to legislative attempts to keep premiums down. Unfortunately, state lawmakers have pursued an approach that includes price controls, regulation of how premiums may be set, and requirements for insurance companies to provide specific types of coverage. As the famous Austrian economist Ludwig von Mises pointed out decades ago, this kind of government intervention, while well-intended, leads to unintended consequences that then lead to further government interventions, further unintended consequences, in a lengthy cycle with results that no legislator would have expected at the beginning.

Rather than attempting to regulate insurance company and individual behavior, Michigan legislators would much better serve the people they represent by examining why insurance premiums are so high in the first place, in order to address the problem at its source. A careful study of Michigan’s insurance market and the regulations governing it indicates that no-fault insurance and the legislative requirement for individuals to purchase unlimited personal injury protection are two important reasons for the increased costs of providing insurance coverage in Michigan. The good news is that it is possible to reduce these costs and reduce the number of drivers who take the risk of violating the law and do not purchase insurance.